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re: What am I missing on my thinking about oil companies
Posted on 10/27/22 at 4:50 pm to NorthTiger
Posted on 10/27/22 at 4:50 pm to NorthTiger
quote:
Same way because the very first thing I wrote is I believe in capitalism. But if I say that I’m not going to blame anyone for those profits.
The danger is not capitalism.
The danger is government partnering with big business.
0
Posted on 10/27/22 at 4:55 pm to NorthTiger
Not too long ago (maybe 3-4 years back), oil was being traded at $19/barrel and companies couldn't afford to develop production because operating costs were too high based on selling at $19.
Profit $ stand out but I have no idea what their profit % is on these sales. No idea how their operating costs have changed over this time frame.
Profit $ stand out but I have no idea what their profit % is on these sales. No idea how their operating costs have changed over this time frame.
This post was edited on 10/27/22 at 4:57 pm
Posted on 10/27/22 at 5:01 pm to NorthTiger
These companies generally just make commodities that are sold on the open market. So they can’t actually price below the open market without a buyer just reselling at the actual market rate. These companies only produce about 20% of the oil in use globally so they don’t control enough to manage the market whereas OPEC+ has over 50% control. We could help these companies by allowing for more production here and opening pipelines to better manage price differences but you know how that goes.
This post was edited on 10/27/22 at 5:07 pm
Posted on 10/27/22 at 5:10 pm to NorthTiger
You make enough money...you should take the bare minimum to survive, from your employer.
Posted on 10/27/22 at 5:15 pm to cwill
quote:
You should re-read the OP.
OK. I've read it again. None of my questions are answered in the OP. What do you think I missed?
Posted on 10/27/22 at 5:18 pm to AUHighPlainsDrifter
Another example of Democrats being morons. Oil companies make a few billion in profits and it's a huge deal. Tech companies make 100 billion in profits and crickets.
Eventually Democrats have to figure out they are being played.
Eventually Democrats have to figure out they are being played.
Posted on 10/27/22 at 5:29 pm to NorthTiger
quote:
What am I missing on my thinking about oil companies
It's a boom and bust industry, that's what you're missing.
This post was edited on 10/27/22 at 5:30 pm
Posted on 10/27/22 at 5:36 pm to NorthTiger
quote:
What am I missing on my thinking about oil companies
My first suggestion would be look up Exxon’s 5 year Return on Equity and then compare to Apple.
Posted on 10/27/22 at 5:38 pm to tenderfoot tigah
quote:
Another example of Democrats being morons. Oil companies make a few billion in profits and it's a huge deal. Tech companies make 100 billion in profits and crickets. Eventually Democrats have to figure out they are being played.
Without any consideration to the size of the company or the return on equity/investment generated.
Posted on 10/27/22 at 5:40 pm to NorthTiger
quote:
What am I missing on my thinking about oil companies
The actual margin. As a % of revenues how are they doing? What’s their ROE? There are a lot better metrics to judge a company on than pure dollars of profit.
Posted on 10/27/22 at 5:40 pm to NorthTiger
Just picking the biggest one to make this point, Exxon Mobil had annual revenue in 2021 of $285.64 Billion. Profit in 2021 was $23 Billion or 8%. That is a completely normal ratio of profit for any company, whether the largest oil and gas company in the world or a small mom and pop in your local community.
Further, that $23 billion in profit is owned by hundreds of thousands of shareholders, not a handful of people. The largest single individual shareholder of ExxonMobil owns 0.03% of stock and and that same % of any profit or loss experienced by the company. That works out to about $6.9 million in 2021 profit for the largest shareholder of ExxonMobil. A lot smaller than most A-list celebrities in 2021. Where's the outrage over them making tens of millions or more per year?
That single example of an investor, Andrew Swiger, earned or purchased 1.2 million ExxonMobil Shares. In other words, at today's share price of $107, he has invested roughly $128.4 million in today's dollars in ExxonMobil. Again, for emphasis, this person invested $128 million into a company and his share of the profit was $6.9 million or 5.3% return on investment. That is not obscene return on an investment, I think can all agree. Now this is a very simplified examination into profit and returns and doesnt even consider the taxes that these individuals paid on these profits plus the amount of money that was reinvested back into the business (meaning the profit may not have even been realized by these investors if the cash was just used to buy more stuff for the company like Capex).
To have anyone interested in investing money, substantial money, into the infrastructure of a company to find, produce, refine, and transport energy around the world, the company has to make at least 5% return, wouldn't you think? Would you invest a dime in a company if it made 2% return annually? No, you probably wouldn't.
Source:
ExxonMobil Shareholders and Financial Data
Further, that $23 billion in profit is owned by hundreds of thousands of shareholders, not a handful of people. The largest single individual shareholder of ExxonMobil owns 0.03% of stock and and that same % of any profit or loss experienced by the company. That works out to about $6.9 million in 2021 profit for the largest shareholder of ExxonMobil. A lot smaller than most A-list celebrities in 2021. Where's the outrage over them making tens of millions or more per year?
That single example of an investor, Andrew Swiger, earned or purchased 1.2 million ExxonMobil Shares. In other words, at today's share price of $107, he has invested roughly $128.4 million in today's dollars in ExxonMobil. Again, for emphasis, this person invested $128 million into a company and his share of the profit was $6.9 million or 5.3% return on investment. That is not obscene return on an investment, I think can all agree. Now this is a very simplified examination into profit and returns and doesnt even consider the taxes that these individuals paid on these profits plus the amount of money that was reinvested back into the business (meaning the profit may not have even been realized by these investors if the cash was just used to buy more stuff for the company like Capex).
To have anyone interested in investing money, substantial money, into the infrastructure of a company to find, produce, refine, and transport energy around the world, the company has to make at least 5% return, wouldn't you think? Would you invest a dime in a company if it made 2% return annually? No, you probably wouldn't.
Source:
ExxonMobil Shareholders and Financial Data
Posted on 10/27/22 at 5:50 pm to NorthTiger
quote:
I don’t blame anyone for the cost of gasoline. I’ve seen high gasoline prices no matter which political party is the majority party so I don’t blame politicians.
Trump is an outlier.
You should hate them all. They could make oil prices better, but then our politicians are as corrupt and default/lazy as it gets.
quote:
I don’t cut back on my driving when prices are high. I cut back in other areas.
Your method of budgeting isn't relevant.
quote:
I suppose I could blame the oil companies but I don’t blame them either.
You ever looked at gas prices in South America?
This post was edited on 10/27/22 at 6:15 pm
Posted on 10/27/22 at 5:53 pm to AUHighPlainsDrifter
quote:
OK. I've read it again. None of my questions are answered in the OP. What do you think I missed?
That’s an odd reading…he doesn’t blame anyone and you’re grilling him like he’s putting forth a windfall profits tax!
Posted on 10/27/22 at 5:56 pm to NorthTiger
quote:
Exxon Mobil: $17.9 billion
Shell: $10 billion
Chevron: $11.6 billion
Conoco: $5.1 billion
On how much spent? If this is 5% profit then so what. If it is 50% then you have something. Look at profit margin percentage instead of raw dollars.
Posted on 10/27/22 at 6:00 pm to GetmorewithLes
they are on their last leg,in the near future we will not need big oil,old and new tech to be released.not talking battery powered either
Posted on 10/27/22 at 6:05 pm to NorthTiger
What are the profit margins?
Posted on 10/27/22 at 6:48 pm to cwill
What is really shameful is the fact that we are literally running these companies out of the country, in the past as oil prices rose, there was a direct correlation in capital investment, its been very slow coming this time around. Its not that the companies are not investing, they are, just not in America nor American jobs.
Places like Guyana are exploding with capital investment from the oil companies. Guyana now has twice weekly flights out of Houston....Guyana.
Places like Guyana are exploding with capital investment from the oil companies. Guyana now has twice weekly flights out of Houston....Guyana.
Posted on 10/27/22 at 6:49 pm to NorthTiger
Youre a fricking idiot
Posted on 10/27/22 at 6:56 pm to Bayoutigre
quote:
they are on their last leg,in the near future we will not need big oil,old and new tech to be released.not talking battery powered either
Not even in this century... pass that joint bro! it must be good stuff.
Posted on 10/27/22 at 7:14 pm to trinidadtiger
quote:
Its not that the companies are not investing, they are, just not in America nor American jobs.
Dude, this just highlights that you don’t know wtf you’re talking about.
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